2007 (11) TMI 538 - AT - Central Excise

Valuation - Related persons - Held that - From the records, it appears that only the clearances to interconnected undertakings have been taken into account for the purpose of quantifying the demanded amount. We also find that the appellants have made various legal submissions in their replies to show cause notice, which have not been taken into account by the Adjudicating Commissioner. As such, we waive the requirement of pre-deposit and set aside the impugned Order and with the consent of both sides, remand the appeals to the Adjudicating Commissioner for fresh decision - appeal allowed by way of remand.

Summary

Issues: Valuation of goods under Rule 8 and proviso to Rule 9 of Central Excise (Valuation) Rules, 2000; Applicability of Rule 10 in case of clearances to interconnected undertakings; Consideration of independent sales in valuation process.

In this case, the appellants challenged the impugned Order passed by the Adjudicating Commissioner concerning the valuation of goods under Rule 8 and proviso to Rule 9 of the Central Excise (Valuation) Rules, 2000 for clearances made to interconnected undertakings. The Consultant for the appellants argued that since the appellants had substantial clearances to unrelated buyers at comparable prices, the application of Rule 8 and proviso to Rule 9 was not justified. He contended that Rule 10 should not apply as there were independent sales, referencing Tribunal decisions in support. On the other hand, the Revenue objected to the lack of details on transactions proving clearances to unrelated buyers submitted by the Consultant. After reviewing the case records and cited case laws, the Tribunal found that the Department failed to demonstrate that Rule 10 was applicable, as it was not shown that the appellants sold goods only to interconnected undertakings. The Tribunal noted that the Adjudicating Commissioner did not consider the legal submissions made by the appellants. Consequently, the Tribunal waived the pre-deposit requirement, set aside the impugned Order, and remanded the appeals to the Adjudicating Commissioner for a fresh decision. The Commissioner was directed to consider the clearances made to independent buyers and interconnected undertakings, along with all evidence on record, allowing the appellants to submit necessary documents and legal pleadings. The appellants were granted a fair hearing before a new Order was issued, resulting in all three appeals being allowed through remand.